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Mongolia-focused Xanadu Mines says it seeks to partially sell or completely divest its thermal coal assets in the Asian nation as it simplifies itself into a copper and gold play there.

Funds raised from the thermal coal sale will fund its copper and gold projects and also finance its coking coal joint ventures with Asian commodities trader Noble Group in Mongolia.

Xanadu chairman Brian Thornton said the company wanted to remain an explorer as this was where its strengths lay: either selling projects when they approached the development stage or taking on board big league joint venture partners to operate them.

Mr Thornton said cash from the expected thermal coal deals would be "a game changer" for Xanadu's exploration push although it was not cash-strapped with about $20 million in the bank currently.

"It just gives us more flexibility and firepower to drill the bigger opportunities."

He said there was scope to uncover monster deposits in Mongolia, where the huge Rio Tinto-managed Oyu Tolgoi copper and gold project is being developed.

"It is the resource-rich frontier of the world currently."

Mr Thornton said Xanadu would in the next three to six months monetise its two wholly owned thermal coal assets in Mongolia or bring in a bigger player to drive their advancement.

The projects, Khar Tarvaga 150km east of the capital Ulaanbaatar and Galshar some 200km from the Chinese border in the south-east, have the advantage of being close to rail spur lines.

"The money that we would get from either the trade sale or joint venture would then fund the copper-gold business ... and also fund our share of the coking-coal business," Mr Thornton said.

"The strategy is, we want to simplify the business to a copper-gold stream and we have a separate joint venture company with Noble for coking coal."

Mr Thornton said Xanadu preferred to remain an explorer because there were two distinct risk phases in mining, exploration and development, and a lot of small companies came unstuck in between.

He said Xanadu planned to continue drilling its promising Sharchuluut copper-gold-molybdenum project in northern Mongolia in March or April.

"That's probably our biggest play this year and we'll certainly be pushing the coking-coal joint venture along as well."